Forecasts for the unemployment rate have been slashed in the federal budget to levels not seen since the early 1970s.

Treasurer Josh Frydenberg will hand down his fourth budget on Tuesday predicting an unemployment rate falling to 3.75 per cent later this year, the lowest level since August 1974.

That compared with a 4.25 per cent forecast for 2022/23 at the time of the mid-year review released in December and six per cent in the October 2020/21 budget, which was the first after the COVID-19 pandemic.

The unemployment rate currently sits at four per cent, a 14-year low.

Mr Frydenberg insists Australia’s economic recovery from the pandemic, faster and stronger than any of the advanced economies of the G7, hasn’t been “luck”.

“It has been the result of a clear fiscal strategy to save jobs and drive the unemployment rate to historically low levels,” he said.

“With more people in work and less people on welfare, the budget bottom line is improving after providing unprecedented economic support to Australians.”


Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)